The fixed asset register helps you manage your assets and keep on top of the depreciation.

 

Fixed assets are assets which are:

  • Not goods for resale in the ordinary course of business.

  • In use for an extended period. Typical examples are computers, equipment, vehicles and property.


The expense of a fixed asset is spread out against profits (depreciated) over its useful economic life - rather than making a rather large dent in the profits of the year in which it was bought. Accountants use the term Net Book Value (NBV) of a fixed asset to refer to its original cost less any depreciation that has accumulated to date.


Table of Contents


1. Enable fixed asset register

2. Fixed asset account codes

3. Depreciation account codes

4. Create a fixed asset 

5. Pending assets

5.1 Add pending asset from a bill 

5.2 Add a pending asset from the bank explain menu

5.3 Approve a pending asset

6. Depreciation

6.1 How to set up auto depreciation for the fixed asset register

6.2 How to manually depreciate all fixed assets on the fixed asset register

6.3 How to depreciate an individual fixed asset

6.4 How to delete depreciation transactions

7. Editing fixed assets

8. Deleting fixed assets

9. Export fixed assets

10. Disposal of a fixed asset


1. Enable fixed asset register

The fixed asset register logs purchases of assets e.g. laptops, office furniture etc and allows you to manage the depreciation.


Navigate to Settings > Configure system > Toggle Features > Features. Use the radio switch beside the ‘Fixed assets’ heading.


2. Fixed asset account codes

Whenever you explain a purchase of a fixed asset in Clear Books, you need to select a fixed asset account code so that it is recognised by the fixed asset register feature.

 

To view the list of fixed asset account codes, navigate to the Settings > Accounting > Account codes menu.

 

The system default fixed asset accounts all appear in the ‘Fixed assets’ account type. An account type is a group name that account codes sit under.

 

 

To create your own fixed asset account codes, click on the Create account code button.


Fill in the details of the form, the account type must be ‘Fixed assets’ found under the ‘Non current assets’ category heading.


Click on the ‘Save new account’ button to complete.

 

3. Depreciation account codes


When creating or approving a fixed asset on the fixed asset register, you will need to select both a ‘Depreciation’ account code and an ‘Accumulated depreciation’ account code. 

 

As you process depreciation transactions, the system will create a journal entry which will Dr the ‘Depreciation’ account code and Cr the ‘Accumulated depreciation’ account code.

 

To view the list of depreciation account codes, navigate to the Settings > Accounting > Account codes menu.

 

The system default depreciation accounts appear under the ‘Depreciation’ and ‘Accumulated depreciation’ account types respectively. An account type is a group name that account codes sit under.

 

 

 

To create your own depreciation account codes, click on the  Create account code  button.

 

Fill in the details of the form

  • For depreciation account codes the ‘Account type’ must be ‘Depreciation’ found under the ‘Administrative expenses’ category heading.

  • For accumulated depreciation account codes the ‘Account type’ must be ‘Accumulated depreciation’ found under the ‘Non current assets' category heading.

 

Click on the ‘Save new account’ button to complete.


4. Create a fixed asset 


Usually, you will create a transaction with a fixed asset account code which will then generate a pending asset on the fixed asset register. However, there may be times that you will need to create a fixed asset independently for example, if you purchased an asset before using Clear Books; where a fixed asset account code has not been used; when a pending asset has been deleted etc.

 

Once a fixed asset has been created, you can generate depreciation transactions manually or automatically in line with the depreciation details you have set for the fixed asset.

 

Navigate to  Tools > Fixed assets  and click on the  Create fixed asset  button.

 

 

Fill out the details of the form appropriately. As the asset is not being generated from a transaction you will need to fill in the ‘Asset name’, ‘Cost’ and you will also need to select a fixed asset account code in the ‘Account’ field. You can also enter a ‘Purchase date’ if you bought the fixed asset before the date at which you would like the asset to start depreciating from.

 

In the ‘Depreciation method’ field you are given a choice of three options. 

 

  • The ‘Do not depreciate’ option will mean that no depreciation will occur.

  • For the ‘Reducing balance’ method of depreciation enter both the ‘Depreciation rate’ and ‘Economic Life’. Enter 0 in the ‘Economic Life’ field to indicate infinite economic life.

  • For the ‘Straight line’ method of depreciation enter the Depreciation rate and the system will automatically calculate and update the ‘Economic Life’.

 

You can select from the default accounts for both the ‘Depreciation account’ and ‘Accumulated depreciation account’. You can create your own accounts as described in ‘Fixed Asset account codes’ 

 

You may need to enter an accumulated depreciation amount if the purchase was prior to starting Clear Books. This will affect the ‘Economic life’ calculation and once confirmed it will also adjust the ‘Net Book Value’ e.g. if the asset cost is £1000 and the accumulated depreciation is £100 the Net Book value will be £900. 

 

In the ‘Depreciation start date’ choose a date from which the asset will generate months to be depreciated from (depreciation will actually begin from the next full month). This field will not appear if you have selected ‘Do not depreciate’ in the ‘Depreciation method’ field.


If you have auto depreciation enabled or use the ‘Process assets’ depreciation feature, depreciation transactions will be created from the ‘Depreciation start date’


 Click on the ‘Confirm new asset’ button to complete.


5. Pending assets


After you explain a payment from the bank explain screen with a fixed asset account code, or a bill on the purchases menu with a fixed asset account code, you can create a pending asset from these transactions. You can then approve the pending asset, on the fixed asset register, by filling in the depreciation details.


5.1 Add pending asset from a bill 


First, create a bill on the Purchases > Bills menu with a fixed asset account (listed under the non current assets heading).


  

Once the bill has been created you will be prompted to create a pending fixed asset in the green confirmation box. Additionally, a ‘Generate pending asset’ button will display when viewing the bill.

 

5.2 Add a pending asset from the bank explain menu


A pending asset can be generated when explaining a transaction from the bank explain screen. 

 

You can reach the bank explain screen when explaining a payment on an imported statement from the Money > Bank accounts menu or by explaining Money out for one of your bank accounts also on the same menu.

 

 

Ensure that the transaction details i.e. Supplier, Description, VAT rate etc, have been set correctly and most importantly that a fixed asset account has been selected (listed under the non current assets heading). 

 

Hit the ‘Add new transaction’ button when complete.


 

When the transaction has been explained, click on the magnifying glass alongside the explained transaction.

 

You can also find these transactions listed under Purchases > Bills > Paid.

 

Next, click on the PAY prefixed bill.

 

And finally click on the ‘Generate Pending assets’ button to create a pending fixed asset.

5.3 Approve a pending asset

 

Navigate to the Tools > Fixed assets > Pending menu. All your pending assets will be listed here.

 

Click on the name of the asset or the edit icon under the ‘Options’ column for the appropriate asset.

 

Fill out the details of the form appropriately. As the asset is being generated from a transaction the ‘Asset name’, ‘Cost’, ‘Purchase date’ and ‘Account’ fields will be populated automatically.

 

In the ‘Depreciation method’ field you are given a choice of three options. 

 

  • The ‘Do not depreciate’ option will mean that no depreciation will occur.

  • For the ‘Reducing balance’ method of depreciation enter both the ‘Depreciation rate’ and ‘Economic Life’. Enter 0 in the ‘Economic Life’ field to indicate infinite economic life.

  • For the ‘Straight line’ method of depreciation enter the Depreciation rate and the system will automatically calculate and update the ‘Economic Life’.

 

You can select from the default accounts for both the ‘Depreciation account’ and ‘Accumulated depreciation account’. You can create your own accounts as described in ‘Fixed Asset account codes’ 

 

You may need to enter an accumulated depreciation amount if the purchase was prior to starting Clear Books. This will affect the ‘Economic life’ calculation and once confirmed it will also adjust the ‘Net Book Value’ e.g. if the asset cost is £1000 and the accumulated depreciation is £100 the Net Book value will be £900. 

 

In the ‘Depreciation start date’ choose a date from which the asset will generate months to be depreciated from (depreciation will actually begin from the next full month). This field will not appear if you have selected ‘Do not depreciate’ in the ‘Depreciation method’ field.

 

If you have auto depreciation enabled or use the ‘Process assets’ depreciation feature, depreciation transactions will be created from the ‘Depreciation start date’


Click on the ‘Approve’ button to complete.


 

6. Depreciation


Once an asset has been created by either approving a pending asset or creating a new fixed asset you can begin to create depreciation transactions using the fixed asset register. 

 

As you process a transaction for the depreciation, the system will create a journal entry which will Dr the depreciation account code and Cr the accumulated depreciation account code.

 

You can control how the depreciation is processed in several different ways.

 

Depreciation will not be processed (or deleted) in locked reporting periods found on the Settings > Accounting > Periods menu.

6.1 How to set up auto depreciation for the fixed asset register


Navigate to Settings > Configure system > Toggle Features > Features.

 

Click on the radio button beside the ‘Auto depreciation’ heading (which is nested under the Fixed Assets feature).

 

Auto depreciation will happen at the end of every month and will create depreciation transactions for every asset for each month since the depreciation start date that has not had a depreciation transaction created.

 

6.2 How to manually depreciate all fixed assets on the fixed asset register


You can process depreciation transactions for all of your assets in one go using this feature. 

 

Navigate to Tools > Fixed assets > Process assets.

 

Click on the ‘Update’ to create depreciation transactions for every asset for each month since the depreciation start date that has not had a depreciation transaction created.

 

Use the ‘Don’t create journals’ checkbox if some assets have not generated new months to depreciate due to locked or non existent financial reporting periods.

 

6.3 How to depreciate an individual fixed asset


You can generate depreciation transactions for individual assets and on specific months that you decide.


Navigate to Tools > Fixed assets and click on the depreciation icon beside the appropriate fixed asset.

 

 

Select the appropriate months to depreciate and click on the ‘Create selected’ button or click on the ‘Create all’ button to create depreciation transactions for all available months.

 

If some months do not appear use the ‘Process assets’ feature and make sure to tick the check ‘Don’t create journals’ checkbox as described in 'How to manually depreciate all Fixed Assets on the fixed asset register' [6.2]



 

6.4 How to delete depreciation transactions


Navigate to Tools > Fixed assets and click on the depreciation icon beside the appropriate fixed asset.

 

If the fixed asset has generated any depreciation transactions, it will display an ID number in the ‘Transaction ID’ column. You can select the transactions you would like to delete using the provided checkbox and hit the ‘Delete’ button or use the ‘Delete All’ button to delete all the transactions created for that asset.


7. Editing fixed assets


You can edit one or multiple assets on the Tools > Fixed assets menu, however, you can only edit the details of an asset if they have not generated any depreciation transactions. You can delete depreciation transactions as described in ‘how to delete depreciation transactions.


To edit assets just select the assets by ticking the checkbox beside their name and hitting the ‘Edit selected’ button. If you need to edit just one individual asset, you can also click on the edit icon under the ‘Options’ column.


If you do edit multiple assets, you will be greeted with the bulk edit view. Here you can change the ‘Account’, ‘Depreciation account’, ‘Accumulated depreciation account’ and ‘Depreciation start date’ on any of the assets you have selected.


8. Deleting fixed assets


You can delete one or multiple assets on the Tools > Fixed assets menu, deleting an asset will also delete all the depreciation transactions associated with that asset.


To delete assets just select the assets by ticking the checkbox beside their name and hitting the ‘Delete selected button. You can also delete a single asset using the delete icon under the ‘Options’ column.

9. Export fixed assets


To export a CSV file with a list of your fixed assets just head to the Tools > Export menu. 


In the table choose ‘Fixed Assets’ in the ‘Data type’ field. All fixed assets will be exported so there is no need to select a date range or period. Make sure to tick the ‘Download File’ check box and hit the ‘Go’ button to start the download. 



The data fields included on the export will include:


Asset name, Asset ID, Asset description, Account name, Asset Account code, Currency, Cost, Net book value, Accumulated depreciation, Date purchased, Project, Bill number, Bill Reference, PO number    PO reference, Supplier name, Depreciation method, Depreciation start date, Depreciation rate, Economic life (years), Depreciation account name, Depreciation account code, Opening accumulated depreciation, Accumulated depreciation account name and Accumulated depreciation account code.


Pending assets are included in the export. By default, their asset ID shows as '0000' or '0' depending on the software used to open the .csv file.


10. Disposal of a fixed asset


You must record the disposal of a fixed asset if it becomes obsolete; no longer in use and you wish to write off the asset, or, in cases where you dispose of the asset by selling this on. Recording the disposal essentially removes both the asset cost and the corresponding accumulated depreciation. Any difference will then be recognised as a profit or a loss on disposal.  

 

Navigate to Tools > Fixed Assets.

 

Note down the type, cost and accumulated depreciation, of the asset you want to remove. Then click on the ‘Archive’ icon next to it, this will cease any further depreciation entries.

 

Do not Delete it as this will delete all the depreciation entries.

 

 

Next, navigate to Settings > Accounting > Account codes.

 

Click on the Create account code button.

 

Create a new code called ‘Profit/Loss on disposal of fixed assets’. Make sure that the account type is ‘Depreciation’. Click on the ‘Save new account’ button at the bottom.

 

Navigate to Tools > Journals > All journals.

 

You will need to create a journal, given the example asset above, the entries will look like so:


  • Transfer Accumulated Depreciation to Disposal account - Dr Accumulated Depreciation 50 Cr  Disposal 50
  • Transfer cost of the asset from Asset to Disposal - Dr Disposal 1000 Cr Asset 1000
  • For the proceeds of the sale, you must create an invoice coded to the Disposal account.

 

Hit the ‘Post journal’ button to complete.

 

The above journal will remove the asset and its depreciation from the Fixed Asset account codes and put its net book value to the profit and loss account.

 

The Profit/ Loss on Disposal account with a Dr balance = Loss, Cr balance = Profit.


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